California Will Require Solar Power for New Homes

Solar panels on a Southern California home. State law requires at least 50 percent of California’s electricity to come from noncarbon-producing sources by 2030.CreditCreditDavid Paul Morris/Bloomberg

By Ivan Penn

May 9, 2018

SACRAMENTO — Long a leader and trendsetter in its clean-energy goals, California took a giant step on Wednesday, becoming the first state to require all new homes to have solar power.

The new requirement, to take effect in two years, brings solar power into the mainstream in a way it has never been until now. It will add thousands of dollars to the cost of home when a shortage of affordable housing is one of California’s most pressing issues.

That made the relative ease of its approval — in a unanimous vote by the five-member California Energy Commission before a standing-room crowd, with little debate — all the more remarkable.

State officials and clean-energy advocates say the extra cost to home buyers will be more than made up in lower energy bills. That prospect has won over even the construction industry, which has embraced solar capability as a selling point.

“This adoption of these standards represents a quantum leap,” Bob Raymer, senior engineer for the California Building Industry Association, said during the public comments before the vote. “You can bet every state will be watching to see what happens.”

Several California cities have required that some new buildings include solar power, or have made commitments to 100 percent clean energy through various sources. New Jersey, Massachusetts and Washington, D.C., have also considered legislation to require that new buildings be solar-ready, according to the National Conference of State Legislatures. And Hawaii is among the states that have mandated other energy-efficiency measures, like solar water heaters.

But California’s move is by far the boldest and most consequential of any.

California law requires at least 50 percent of the state’s electricity to come from noncarbon-producing sources by 2030. Solar power has increasingly become a driver in the growth of the state’s alternative energy production.

And a new rate structure coming next year will charge California customers based on the time of day they use electricity. So homeowners with energy-efficiency features — a battery in particular, allowing energy to be stored for when it is most efficiently used — will avoid higher costs.

“Any additional amount in the mortgage is more than offset,” said Andrew McAllister, an Energy Commission member who led a building-code review that produced the proposal. “It’s good for the customer.”

The building-code change is one dimension of a broader transition away from centralized power. As with the breakup of the phone monopoly, which allowed customers to choose providers and shop for rates, changes in the way energy is delivered put more control into consumers’ hands.

Those goals have been furthered with smart meters that help control consumption, along with a choice of electricity retailers in many places. And with a combination of residential solar power and battery storage, homeowners can minimize their resort to the grid altogether.

At the end of 2017, California was by far the nation’s leader in installed solar capacity. Solar power provides almost 16 percent of the state’s electricity, and the industry employs more than 86,000 workers.

Under the new requirements, builders must take one of two steps: make individual homes available with solar panels, or build a shared solar-power system serving a group of homes. In the case of rooftop panels, they can either be owned outright and rolled into the home price, or made available for lease on a monthly basis.

The requirement is expected to add $8,000 to $12,000 to the cost of a home.

“Our druthers would have been to have this delayed another two or three years,” said Mr. Raymer of the building-industry group. But he was not surprised. “We’ve known this was coming,” he said. “The writing was on the wall.”

For residential homeowners, based on a 30-year mortgage, the Energy Commission estimates that the standards will add about $40 to an average monthly payment, but save consumers $80 on monthly heating, cooling and lighting bills.

Will Clever, a 67-year-old retired correctional officer, moved into a new house six months ago in Roseville, about 20 miles northeast of Sacramento, where the developer KB Home offered the buy-or-lease option for solar panels.

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An array of solar panels in Oakland, Calif. Solar power provides almost 16 percent of the state’s electricity.CreditLucy Nicholson/Reuters

Not having the $14,000 it would cost to buy the panels, he chose a 20-year lease from SunPower, the nation’s No. 2 commercial solar-power company, for $76 a month.

The Sacramento area can have brutal summers, and having once lived in Phoenix, “I didn’t want to pay a fortune,” he said. “I was looking for a way of fixing my costs.”

So far, he considers it money in the bank. “As electricity costs go up, I don’t have to worry about it,” Mr. Clever said.

California averages about 80,000 new homes a year, with about 15,000 currently including solar installations. Over all, at the current rate of home building, the new requirement will increase the annual number of rooftop solar installations by 44 percent.

The approved requirement is expected to give a strong lift to California’s already hot solar market.

“This is a very large market expansion for solar,” said Lynn Jurich, co-founder and chief executive of Sunrun, a leading solar installation company. “It’s very cost effective to do it this way, and customers want it.”

“There’s also this real American sense of freedom of producing electricity on my rooftop,” Ms. Jurich said. “And it’s another example of California leading the way.”

A strategic plan drafted by the California Public Utilities Commission in 2008 called for all new construction by 2020 to have net-zero energy needs — that is, to produce enough electricity on their own to avoid having to buy it from the power grid.

The Energy Commission’s plan is less ambitious. It requires new homes to have a solar-power system of a minimum 2 to 3 kilowatts, depending mostly on the size of the home. Residential solar arrays are typically two to three times that size, often enough to put power into the grid.

In fact, the state itself generates so much solar and wind power that it must sometimes halt production at some facilities or give the electricity away to other states to avoid overloading the electric grid.

And there may be a downside for some consumers in the increasing reliance on alternative energy sources.

San Diego Gas and Electric, for instance, said it hoped the state would ensure that utilities can generate enough revenue to operate the electric grid, as homeowners who can afford solar leave those less fortunate to pick up the cost of running the electric system.

“It’s a growing problem,” Tim Carmichael, state agency relations manager for the utility, told the commission. “It’s hurting families that can’t afford solar. We continue to support solar growth. We want to ensure that program structure is appropriate.”

The utility industry has been preparing for the proliferation of energy-producing homes by studying its impact on the electric grid with tests like a net-zero community developed in Fontana, east of Los Angeles. The utilities are trying to determine how to manage a system where homes are putting electricity onto the grid during the day and consuming it at night.

“We’ve been working towards it,” said Ram Narayanamurthy, technical executive at the Electric Power Research Institute, a nonprofit group that does research for the nation’s power companies. “What we think we will see is greater and greater efficiency.”

The Fontana research has shown that with a combination of energy-efficiency measures and solar power, the overall cost of owning a home is reduced, he said.

The commission members saw their vote as advancing that vision of the future. “I’m really happy to get this to the finish line,” Mr. McAllister said. “One big step for mankind.”

A version of this article appears in print on , on Page B1 of the New York edition with the headline: Solar Power to Be Required For New Homes in California. Order Reprints | Today’s Paper | Subscribe